By Dhirendra Tripathi
Investing.com – Cabot stock (NYSE:CBT) soared more than 10% Tuesday after the specialty chemicals company raised its annual outlook following a strong first quarter.
The company expects higher pricing it is extracting from its clients under new agreements and sequential improvement in volumes in key products to drive its performance through the year. Its battery materials business, a focus area for the company, recorded a year-over-year volume growth of 58% in the first quarter.
The company said a “top five battery manufacturer” has selected it under its new EV battery program and sales are expected to begin in the third quarter of the current financial year.
Cabot now expects its annual EPS to come in between $5.50 and $5.90, up from its November guidance of $5.20 to $5.60.
“. . .We expect demand to improve across all of our key product lines and a step up in profitability largely due to the benefit from our 2022 customer agreements. . .,” a company statement quoted President and Chief Executive Officer Sean Keohane as saying.
Net sales in the first quarter rose nearly 30%, to $968 million.
The company said it has struck a deal to acquire a plant in Tianjin, China, from Tokai Carbon Group to support growth in battery materials. The deal should close in the current quarter, according to the company. Following this, the company is also expecting its battery materials plant in China’s Xuzhou to start in the second half.
Cabot’s profit per share in the first quarter rose more than 9%, to $1.29 as a higher cost of sales ate into the revenue.